Two companies targeting Spanish-speaking consumers with claims that they could improve consumers’ credit ratings have allegedly violated federal laws, according to the Federal Trade Commission. The FTC has asked a federal district court to halt both companies’ illegal business practices and award consumer redress.

The FTC alleges that Florida-based Sunshine Credit Repair Inc. and Service Brokers Associates Inc.

Two companies targeting Spanish-speaking consumers with claims that they could improve consumers’ credit ratings have allegedly violated federal laws, according to the Federal Trade Commission. The FTC has asked a federal district court to halt both companies’ illegal business practices and award consumer redress.

The FTC alleges that Florida-based Sunshine Credit Repair Inc. and Service Brokers Associates Inc. have violated the Credit Repair Organizations Act (CROA) by: (1) charging consumers money before performing promised services; (2) failing to provide consumers with written statements concerning their credit file rights; and (3) failing to inform consumers of their right to cancel a contract. The FTC further alleges that Sunshine Credit violated the CROA and the FTC Act by making deceptive claims about the company’s ability to remove accurate, negative information from consumers’ credit reports.

According to separate FTC complaints, Sunshine Credit and Service Brokers use Spanish- and English-language advertising to induce consumers to pay up-front fees for the defendants’ "credit repair" services. The FTC alleges that Sunshine Credit typically charges a $198 fee for its services, while Service Brokers typically charges $300 to $400. Under the Credit Repair Organizations Act (CROA), it is illegal to charge consumers money before performing the promised credit repair services.

"When it comes to credit repair, only time, a conscientious effort, and a personal debt repayment plan will improve your credit report," said Brad Elbein, director of the FTC’s Southwest Regional Office. "No credit repair company or consumer has the right to remove accurate, current information from a credit report."

According to the complaints, prior to their signing of a contract, both companies allegedly failed to provide consumers with required statements informing them about their rights under federal and state law to dispute inaccurate information themselves and explaining the limitations of credit repair. In addition, the FTC alleged that both companies fail to inform consumers they have the right to cancel their contracts without penalty.

According to the FTC, consumers can remove inaccurate information from a credit report themselves – credit repair companies have no greater power to do so. If consumers notice errors on their credit reports, they should contact the credit bureau to dispute that information. The credit bureau will then conduct an investigation and, if the entry on the report is found to be inaccurate, it will be removed. The FTC offers advice for consumers looking to go through this process, as well as indicators that a "credit repair" offer may be a scam.

The FTC’s complaint against Sunshine Credit names Sunshine Credit Repair Inc., and Gabriela Etchevarne as defendants. The complaint against Service Brokers names Service Brokers Associates Inc. and Daniel Gonzalez as defendants.

The complaints were filed in the U.S. District Court for the Southern District of Florida on Jan. 26, 2005.

***

What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×